A company is a separate legal entity registered with the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. The most common form for small and medium business is a proprietary limited company — written as Pty Ltd after the company name.

Key identifiers

ACN — 9-digit company number issued by ASIC at registration.
ABN — 11-digit number derived from the ACN, used for tax and business dealings.
TFN — separate tax file number for the company's income tax.

Tax rates

A company pays company income tax on its taxable income: 25% for base rate entities (aggregated turnover under $50 million, with at least 80% of assessable income being passive income — the 'base rate entity passive income test') and 30% for other companies. Distributions to shareholders are made as franked or unfranked dividends, with franking credits representing the tax already paid by the company.

Director obligations

All directors must obtain a Director Identification Number (Director ID) from the ATO before being appointed. Ongoing obligations under the Corporations Act include the duty to act in good faith, in the best interests of the company, with care and diligence, and to avoid insolvent trading. Directors can be personally liable for unpaid PAYG withholding and SGC if the company fails to remit them.